Chic O.C. dining chain files bankruptcy

Aug. 15, 2008

Updated Aug. 21, 2013 1:17 p.m.

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CHAT BEFORE: David Wilhelm's Chat Noir dining room in 2004. The Costa Mesa restaurant was rebranded last year by Culinary Adventures, which filed for bankruptcy protection this week. KEVIN SULLIVAN, THE ORANGE COUNTY REGISTER

CHAT BEFORE: David Wilhelm's Chat Noir dining room in 2004. The Costa Mesa restaurant was rebranded last year by Culinary Adventures, which filed for bankruptcy protection this week. KEVIN SULLIVAN, THE ORANGE COUNTY REGISTER

Citing a drastic downturn in the economy, Newport Beach-based Culinary Adventures - operator of upscale eateries in Southern California including French 75 - has filed for Chapter 11 bankruptcy protection.

On Thursday night, the company closed one of its more high-profile eateries - Wilhelm's Chophouse at the Market Place in Irvine. Up until spring, the eatery once operated under the French 75 banner. Two Los Angeles eateries are also closing, according to the Foothill Ranch law firm representing Culinary Adventures.

Famed restaurateur and chef David Wilhelm founded the company in 1997. Now a minority shareholder in the company, Wilhelm resigned from the company earlier this week, said bankruptcy attorney Mark Bradshaw.

Bradshaw and attorney John Mark Jennings said soaring food costs combined with slow foot traffic have contributed to the chain's downfall. Year over year sales dropped 25 percent at some eateries, according to the bankruptcy filing.

"It is absolutely economic conditions driving this," Jennings said.

Besides the French 75 brand, Culinary Adventures operates Savannah restaurants in Costa Mesa and Laguna Niguel; Savannah at the Beach in Huntington Beach and Sorrento Grille in Laguna Beach.

Those remaining eateries are expected to remain in operation.

Over the last year, Wilhelm has clearly struggled with his various concepts.

In 2007, he scrapped his sultry French bistro Chat Noir in Costa Mesa - rebranding it under the Savannah banner. At the time, Wilhelm said the contemporary American concept was expected to have wider appeal compared to the Moulin Rouge-inspired French eatery.

"When I did Chat Noir, I thought it was something a little unusual. A little different," Wilhelm told the Register in November 2007. "We had a pretty good run. (But) things started to flatten out, and the perception of the restaurant (being French) - there's a lot of baggage attached to it."

The French 75 eateries have also been perceived as "special occasion" dining. Earlier this year, French 75 at the Market Place in Irvine closed and reopened as Wilhelm's Chophouse. Culinary Adventures dubbed the new eatery a more "Americana" concept. It served its last diners Thursday.

In a statement, Culinary Adventures said it will be operating in a business as usual fashion "paying its post-bankruptcy debts as they become due."

Culinary's attorneys are expected to appear later today before a judge in U.S. Bankruptcy Court in Orange County. Chapter 11 bankruptcy allows a company to submit a plan to become profitable while paying creditors over time.

In contrast, a Chapter 7 bankruptcy filing - such as the one made recently by Bennigan's, means a company seeks to liquidate its assets and close its doors.

Earlier this year, Chicago-based restaurant consulting firm, Technomic, revised its 2008 U.S. foodservice industry growth rate from 3.6 percent to 2.2 percent because of "worsening" economic conditions. In its report, Technomic said full-service restaurants are facing the greatest challenges during this long-term economic slump.

Ron Paul, president of Technomic, said Culinary's woes are not surprising.

"It's a tough environment. We're expecting to see more Chapter 11 filings by the end of the year," said Paul, who has an office in Newport Beach.

Industry data shows that fast-food and fast-casual chains are faring better as many consumers trade down to cheaper eats.

Though this category is performing better, Bradshaw said Culinary Adventures will continue to operate as an upscale dining establishment.

"There's no intention to change concepts," Bradshaw said.

Culinary Adventures could emerge from bankruptcy within six months, he added.

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